Amazon Earnings Halt the Rally
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Jonathan Yates
Amazon Earnings Halt the Rally

Apple (NASDAQ: AAPL) was again up today, but there are negative indicators in the action of the high tech giant.  When Apple announced earnings after the bell rang on Tuesday,  the stock was up as much as seventeen points in the after-hours session.  However, by the time it finally closed it was negative two points, despite the $100 billion bribe to shareholders not the sell.

The earnings report was not that bad for Apple.  Due to the $100 billion dividend increase and share buyback, Apple is up 4.17% for the week.  However, for 2013, Apple is down by 22.81%.  In a very ugly trend, Apple is down for the last month, quarter, six months and year of market action.  What is also a bearish sign is that the volume for Apple is weak.

The introduction of the iPhone 5 last September was the high point, as shown by the chart below:


It used to be that Apple was what brought the market indices higher.  But as the chart below shows, Apple is moving in an inverse relationship to the Standard & Poor’s 500 Index (NYSE: SPY):



The times, they are a changing, that is for sure.  It could be that the recent surge in Apple is propping up the S&P, Dow (NYSE: DIA), and Nasdaq (NYSE: QQQ).  Earnings season has not been that great, but the SPY, DIA, and QQQ are doing well as demonstrated quite clearly by the chart below:




The indicators were strong today, until the closing bell.  Amazon’s (NASDAQ: AMZN) earnings missed.  The  Internet retailer is down more than 8 points in after hours trading.  That produced the the candlestick patterns that were long, negative and engulfing, which is very bearish.  In addition, bearish sentiment is over 70%, a high.


Volume was above average for each exchange.  Both gold (NYSE: GLD) and oil (NYSE: USO) closed higher.  For gold, today’s 2.7% gain was the highest for the year.

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